New York Bill Seeks to Prohibit Certain Sports Event Contracts

• Assemblyman Clyde Vanel (D-33) introduced a bill to prohibit certain sports event contracts
• The bill also prohibits several prediction market contract types
• Bill allows customers to purchase sports event contracts related to outcomes of tournaments, brackets predicting results of a tournament

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A New York Assemblyman is hoping to pass legislation to prohibit sports event contracts in the Empire State.

Assemblyman Clyde Vanel (D-33) recently introduced bill A9251, which seeks to prohibit the sale of sports event contracts in the state. The legislation also seeks to prohibit the sale of several other prediction markets in New York.

The bill will prohibit certain sports event contracts related to single athletic events or events within an athletic event.

Not All Sports Event Contracts Prohibited

According to Vanel’s legislation, the following athletic event contracts will be prohibited in the state for New York customers:

“‘Athletic event market’ means a prediction market that enables a consumer to open a speculative position on the outcome of a specific athletic event or events or events within an athletic event or events.”

Additionally, the bill will prohibit horse racing and prop betting contracts to be sold as well.

However, the legislation does not include a prohibition on users purchasing sports event contracts on the final outcome of an athletic tournament or on the combination of all outcomes of each event within an athletic tournament, such as an overall champion of a sports tournament, or a bracket predicting all results of a tournament.

Vanel’s legislation also prohibits the following prediction markets:

• Catastrophic event markets: Prediction markets that enable a consumer to purchase contracts on an outcome related to war, state or national emergencies, natural or human-made disasters, mass shootings, acts of terrorism, or publish health crises
• Political markets: Prediction markets that allow customers to purchase contracts on federal, state, or local elections. Additionally, prohibits contracts on the actions of federal, state, or local politicians
• Death markets: Prediction markets that allow customers to purchase contracts on the death, assassination, or attempted killing of a person or group of persons, or on mass casualty events
• Security markets: Prediction markets that allow customers to purchase contracts on the price of a publicly traded company

Additionally, the legislation prohibits customers from using credit cards to purchase prediction market contracs.

The bill currently sits in the Assembly Consumer Affairs And Protection Committee. It likely faces an uphill battle for approval and would also likely face legal challenges from prediction market companies if approved by the state.

Kalshi Already Engaged in New York Lawsuit

Kalshi filed a lawsuit against members of the New York State Gaming Commission just two days after the regulatory body sent a cease-and-desist letter to the prediction market company on Friday, Oct. 24.

Kalshi preemptively took legal action against New York after its gaming commission ordered the prediction market company to cease offering sports event contracts in the state. The lawsuit was filed in the U.S. District Court for the Southern District of New York over the weekend.

The company took a similar tact in Ohio, filing a lawsuit against the Ohio Casino Control Commission and Attorney General before the state could file a lawsuit against Kalshi after filing its own cease-and-desist notice.

Kalshi pointed to federal courts in both New Jersey and Nevada, which granted the company preliminary injunctions to prevent “similar state overreach.”

The courts, Kalshi noted, explained it is a “CFTC-designated DCM” and is subject to the Commodity Future Trading Commission’s exclusive jurisdiction.

Kalshi seeks an emergency temporary restraining order and preliminary injunction against the New York State Gaming Commission to avoid “immediate and irreparable harm that would result from Defendants’ unlawful acts.”